(Reuters) - The Sri Lankan rupee ended steady on Monday despite early importer dollar demand and stocks-related outflows, as banks were reluctant to trade the local currency beyond 130.70 per dollar due to moral suasion by the central bank, dealers said. The currency is likely to gain due to expected inflows from remittances in early April, dealers said. The spot rupee closed steady at 130.70/75 per dollar. However, the rupee forwards edged up due to remittances, exporter and bank dollar sales ahead of the festive season. "We are seeing inflows coming in slowly. So the pressure is easing," a currency dealer said on condition of anonymity. Four dealers said the central bank had asked banks to keep the rupee at the 130.70-per-dollar level to reduce volatility However, Nandalal Weerasinghe, one of the central bank's deputy governors, said the central bank has not changed its policy of not targeting any specific rate. "Perhaps dealers may have their own targets if they say so. Of course, moral suasion is one of the instruments many central banks use to manage short-term volatility," Weerasinghe told Reuters. Dealers early in the day said a foreign bank bought dollars for stocks-related outflows after foreigners sold a net 2.77 billion rupees in stocks on Friday, following a U.N. resolution to probe alleged war crimes in Sri Lanka. They expect the rupee to appreciate from early April, with a dip in importer dollar demand and a rise in inward remittances before the traditional Sinhala-Tamil new year. Central bank Governor Ajith Nivard Cabraal said on March 19 that the rupee would be stable throughout this year due to increasing inflows from exports and remittances. Dealers said lack of credit demand for imports will help reduce downward pressure on the rupee. The currency gained 0.25 percent since Feb. 27, but has fallen 0.08 percent so far this year, Thomson Reuters data showed. (Reporting by Shihar Aneez and Ranga Sirilal; Editing by Sunil Nair)

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